SUM - Summerset Group

[couta1]

SUM closed week at $8.00 - that’s good

Wonder what RYM closed at?

Haha exactly $16 of course, cant beat that ratio aye.

[Baa_Baa]

SUM closed week at $8.00 - that’s good

$8.00 also an ATH closing price.

[Beagle]

Haha exactly $16 of course, cant beat that ratio aye.

I'm waiting for that 1 SUM = 1 MET to come good ...and I'm pretty sure Maverick is hanging out for the 1 RYM = 10 OCA, heck that's $1.60

[winner69]

I'm waiting for that 1 SUM = 1 MET to come good

No no Beagle - MET reverts to the mean with RYM

Yep,even better when MET reverts as well.

[Beagle]

How could one not be happy. Its nearly Christmas and both SUM and MET have moved up to the point where they're both only 20% undervalued now. Happy days
SUM $10+ in 2020, you read it from me first

[winner69]

Beagle post from another thread

A Bullish case for SUM based on superior growth and very realistic PE

Is more than a little spooky. The other day I noted way back in 2011 when SUM first listed the situation prevailed even then.

Thankfully the past no matter how sticky is not always a good guide to the future and I note for many years the two stocks traded on not dissimilar underlying PE's.

That situation is vastly different today.

At the mid point of RYM's forecast 31/3/20 underlying profit of $257.5m RYM trades on a forward earnings of 51.5 cps = forward PE at $16 of 31.

If SUM make $117m underlying for 31/12/19 that's also 51.5 cps, that's right folks exactly the same, and SUM's only a forward PE of just 15.5.

SUM trading at half the PE is not common over the years comparing these two and reflects the fact that SUM's earnings have grown much faster than RYM's over the 8 years since its listed that we can compare these two.

Heck, if SUM lifts its build rate in 2020 and the real estate market is strong so we get a ~ 25% lift in underlying profit for 2020 to 64.4 cps at $8 (even though this is a fresh all time high), SUM could be trading on a forward PE for 2020 of just 12.4 times earnings. WOW, that is stupidly cheap and this sector is going to be on fire and flush with well over $1.5 billion dollars of capital looking for a new home after the probable MET takeover. SUM were nearly $8 way back in August 2018 so in relative terms has done very little in gains for well over a year.

2020 could be SUM's year and with a resurgent real estate market there's no logical reason why we shouldn't see some PE expansion up towards the market median PE of 19.

How good could it get for SUM in 2020 ?. 19 x 64.4 cps underlying earnings = $12.23. We could see 50% added to SUM's price in 2020 in a favourable rerating scenario. One day the market will wake up to what a phenomenal growth story SUM has been since it listed, maybe after a decade of fantastic growth, heck that's late 2021, not that far away and could be $15 by then. I think its time to add SUM more to my position.

[winner69]

Still a few who think property prices don’t matter that much for retirement sector valuations

MET said the other day - The valuation of the company is particularly sensitive to house price inflation (HPI) and construction cost inflation

[Beagle]

I topped up with some more SUM today. Takeover of MET almost certain to go ahead in my opinion and over one and half billion dollars will be looking for another home, much of it in the retirement sector as institutions rebalance their portfolio's. SUM is not expensive as pointed out with fundamental analysis above and from a technical analysis point of view the chart looks very encouraging.

Institutions will be looking for a well proven performer in this sector trading on compelling metrics to replace their MET shares with and SUM really stands out based on its long proven performance and exceptionally high average annual eps growth rate. The other thing is, if private equity sees value in MET, who's next ?

[winner69]

Topped up as well beagle

Broker made comment jeez winner you paying heaps more now than that first lot you got at $1.78 years ago

Told him you will be saying that again in years to come.

[Beagle]

Topped up as well beagle

Broker made comment jeez winner you paying heaps more now than that first lot you got at $1.78 years ago

Told him you will be saying that again in years to come.

Good on ya mate. Don't forget to tell your broker its on half the PE now that it was when you first bought so effectively with earnings growth over the years you're buying double the value you were back then. WOW, that's quite a SUM of compound earnings growth over the years eh mate.